Joydeep Srivastava

Who they are

Biography beyond the cited work is not recorded, by rule. The affiliation stated here is the one printed on the 2013 paper's publisher record, the University of Maryland, College Park, and it is the affiliation at the time of publication.

Two of his papers sit in this vault, and they come from different questions. One is about how a payment's form changes spending. The other is about how a free offer changes the valuation of a product.

Key papers

Palmeira, M. M., & Srivastava, J. (2013). "Free Offer Is Not a Cheap Product: A Selective Accessibility Account on the Valuation of Free Offers." Journal of Consumer Research, 40(4), 644-656. Second author. Abstract read.

Raghubir, P., & Srivastava, J. (2008). "Monopoly Money: The Effect of Payment Coupling and Form on Spending Behavior." Journal of Experimental Psychology: Applied, 14(3), 213-225. Second author. Listed in the vault's note on him; discussed in Why Paying by Card Feels Cheaper.

Key ideas

The 2013 paper asks what people will pay for a product after a promotion in which it was free or discounted. The abstract reports that willingness to pay after the promotion is retracted is higher when the product was offered for free than when it was offered at a low, discounted price.

The reasoning is selective accessibility. The price of a product on promotion serves as a natural anchor when people estimate its value. A free offer provides no such price. Consumers are then less likely to consider the product's value, and they are influenced by other anchors, such as the price of the focal purchase that the free product came with. The paper's conclusion, set against some earlier findings, is that a free offer does not devalue the product at all and, at a minimum, devalues it less than a low discounted price would.

As second author he shares credit for the argument with Palmeira, whose name is first on the paper. The vault's page for Palmeira covers his sole-authored work on zero.

The 2008 paper on payment is cited here only from the vault's existing note, which records its subject as the effect of payment coupling and form on spending. It was not re-read for this page, so this page makes no claim about how its argument relates to the free-offer paper.

A seller should be careful about what to take from it. The comparison in the abstract is between a free offer and a low discounted price, and the outcome is willingness to pay once the offer has been withdrawn. The abstract describes no comparison of a free offer with no offer, and no test of repeated promotions. A product given away every month may stop being valued for reasons the paper does not address. The result is a narrow one, about willingness to pay after a promotion is withdrawn, and it should be used that way.

What the 2013 paper does not report, as far as the abstract shows, is how long the effect lasts, how it varies across product types, or what it means for a promotion's profit. This page was written from the abstract, and the studies behind it were not read in full, so samples and effect sizes are not given.

For practical purposes, the paper offers a question to ask of any bundle. When a product is thrown in for free, what would you pay for it on its own? If the offer has stopped you asking, the offer has already done part of its work.

---